Recurring Billing
Candlefocus EditorThe concept of recurring billing is relatively simple. A customer signs up for the service/product offering of their choice and makes the initial purchase payment with their credit card, bank account or other accepted payment method. Following the customer's initial payment, the customer's payment method is automatically and regularly directed to the business on the predetermined schedule, usually monthly or semi-monthly.
Recurring billing can be beneficial for businesses as it reduces customer account receivables risks, allows for more complete and accurate billing and effective customer payment management. Businesses that utilize recurring billing can monitor their own customer accounts, more accurately track and monitor customer payments, and can simplify the process of collecting payments and customer account maintenance.
For customers, recurring billing can save them time in that they only have to enter the payment information once. Additionally, the scheduled and automated payments can be helpful in staying on top of account balances and building a better credit score as customers don’t have to worry about late payment fees or missed payments.
Recurring billing is a great solution for businesses that offer a product or service that requires multiple payments over time such as a subscription business model. It has become increasingly popular for services such as streaming media, newspaper subscriptions, and membership fees. Additionally, many software providers offer subscription models which are often billed on residual basis utilizing the process of recurring billing.
Business owners who want to explore recurring billing should investigate the various advantages of the service and its capabilities. Companies must consider their customer’s needs and timeline for payments as well as their own billing schedule and procedures. Investing in a reliable and secure recurring billing system that meets both their customer’s and their business needs is essential in running an effective subscription business.